Truck taxes could rise significantly under a mileage-based tax

By David Tanner, Land Line associate editor | 1/14/2013

Truckers could pay significantly more than they do now should Congress choose to use mileage instead of fuel consumption to calculate roadway taxes. A recent report by the Government Accountability Office suggests that commercial trucks could pay between 3 and 8 cents per mile under a tax on vehicle miles traveled, or VMT.

The GAO recommends that Congress conduct a pilot program on a mileage-based user fee to one day replace the fuel tax. One way to do that, the GAO says, is to study the viability for commercial trucks and electric cars – two demographics the Federal Highway Administration says are not currently paying their fair share into the Highway Trust Fund.

Heavy trucks currently pay an average of $3,363 into the Highway Trust Fund per year based on gallons of fuel consumed, according to the GAO report. That average could increase to $5,792 under one of three scenarios suggested by the GAO.

OOIDA takes issue that trucks are not paying their fair share, and says the current average for an owner-operator with one truck and trailer is more like $4,400 per year – and even then, the number does not include the Heavy Vehicle Use Tax, tire taxes, or the 12 percent excise tax on heavy equipment purchases including trailers. The purchase of a new truck or trailer would add thousands to the total.

In its report, the GAO devised three scenarios to study a VMT tax: one that would “break even” with the current fuel tax by generating $34 billion per year; one that would increase fees to meet investment needs at $53.5 billion per year; and one that would keep up with the performance needs of the system at $78.4 billion per year. The most expensive would amount to 8.4 cents a mile for truckers.

By comparison, passenger cars would pay between 1 and 2 cents per mile depending on the scenario. But the GAO report does not focus on passenger vehicles – saying the cost to implement a nationwide program is currently cost-prohibitive.

OOIDA says charging truckers disproportionately more in taxes is not in the nation’s best interest. Highways provide more value to the economy than the numbers show, OOIDA Executive Vice President Todd Spencer says.

“Good roads provide people with greater mobility,” Spencer said. “They stimulate and promote tourism. Same for economic development. We all benefit from highways regardless of whether you drive or not, but right now only users are paying in.”

In the report, the GAO discusses setting a price point within the mileage tax in an effort to reduce roadway congestion.

“This is a problem under the current gas tax, and simply shifting to VMT is not going to make that problem go away,” said OOIDA Director of Legislative Affairs Ryan Bowley.

“Indeed, under VMT there would be the potential to make the cost of driving a car or a truck amazingly prohibitive since depending upon how it was structured there could be the ability to automatically increase rates.”

The GAO report goes on to say that the amount paid by trucks into the Highway Trust Fund is not enough to keep up with road wear.

“Currently, heavier commercial trucks generally contribute less to the Highway Trust Fund than the costs of their road use,” the GAO stated. “Adjusting the illustrative mileage fee rates to reflect the road damage caused by different vehicles would notably increase commercial truck rates and modestly decrease passenger vehicle rates.”

The agency adds, however, that the Federal Highway Administration does not currently have updated information about vehicle classes and road wear.

“However, setting rates that reflect the current costs that different users impose on the system would require up-to-date estimates of vehicles’ responsibility for road damage, which are not available,” the GAO stated.

The GAO delivered its recommendations to committees in the House of Representatives, where some lawmakers have been talking about VMT taxes for years.

U.S. Rep. Earl Blumenauer, D-OR, has introduced bills the past few years calling for a VMT pilot program at the federal level. His home state continues to study a mileage-based tax for automobiles.

Copyright © OOIDA